By: Rob Wertheimer
One way to look at URI results is that the company’s announced $1.25bn share buyback could be done with this year’s excess cash flow after growth capex, and it would be the equivalent to buying back 8% of the company at current share prices. Revenues would still be positioned to grow high single digits on spending done this year… capex to drive 5% fleet growth off the year-end levels, and with 2-3% pricing, for revenue growth of 7-8%. Actual revenue growth is higher, due to spending last year that built fleet. We’re just making a simplified point on cash this year. All this from an industry that investors perceive to spend negative cash building fleet at peak. That’s no longer the case for URI and for Ashtead, and the market is slow to catch up.
Note: Report published on 4/19/2018